Penang undersea tunnel project study overpriced by five times

PUTRAJAYA: Malaysian Anti-Corruption Commission (MACC) investigators probing the alleged discrepancies in Penang's undersea tunnel project believe the costing for the design and feasibility study of the project estimated at RM305 million is overpriced by five times.

Sources familiar with the progress of the investigations said the cost for the study should not have exceeded a fifth of the sum which was penned in a contract between the Penang government and the tunnel builder Consortium Zenith Constructions Sdn Bhd.

The state government paid the company the sum in the form of two plots of land in Penang which MACC investigators believe is valued way higher than the RM305 million cost for the study.

Sources said investigators are primarily looking into the land swap deal and if it adhered to procedures set by the state government regulations.

"The Public Works Department (PWD) sets the costs of any such study and when it is found to be way higher from what is estimated, there is suspicion if there are elements of embezzlement," sources said.

Investigators are examining documents related to the contract and project and had gone to the Penang Land and Mines Department today to acquire additional documents relevant to the case.

On Tuesday, two company directors were held by the MACC in connection with the case.

MACC deputy commissioner Datuk Sri Azam Baki when contacted today said investigators have recorded statements from at least 10 people comprising of officers form the State Secretariat, Land and Mines Department, PWD, Economic and Financial Planning Department and a managing director of a company.

He said investigators went to 12 government agencies and private companies in Penang and Kuala Lumpur today to record the statement of witnesses.

"There will possibly be more arrests when we obtain fresh evidence in the probe and from the statements we obtained," he said.